Defending a Business Lawsuit Worksheet

Answer 1

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When a party is sued, a notice of the lawsuit is formally delivered by sheriff or process server to the business, the business's registered agent, or the officers or directors. The notice will state the name and address of the plaintiff(s) and the type of complaint filed.

If you receive notice that you have been sued, you MUST ANSWER BY A DESIGNATED DATE. You should also notify your insurance carrier immediately. If you fail to answer the lawsuit, the judge may enter a "judgment" against you for all money or property claimed by the plaintiff(s) and require you to pay all court costs. A judgment is an official court order which may be enforced by garnishment of money owed to you or your bank account or by having the Sheriff seize and sell your property. You can attempt to have the judgment "set aside" (voided) if you do not receive proper notice, but this happens infrequently; other excuses are usually ignored.

Even after the suit has been filed, the defendant has an opportunity to settle the dispute out of court. All parties may save both time and money by resolving the case prior to a court hearing. The defendant should contact the plaintiff and offer to discuss the dispute, possibly offering a settlement. If an agreement is reached, a "release" will have to be prepared and signed by both parties, and filed with the clerk of court. Once it is filed with the court clerk, both parties will be required by law to obey it. The plaintiff should also "dismiss" the action, to remove the suit from the court system.

After considering the plaintiff's claim, the defendant may determine that some third party owes all or part of the amount being claimed by the plaintiff. In that event, the defendant should file a "cross claim" to bring in the additional party. Also, a "counterclaim" against the plaintiff may be filed by the defendant, asking for damages from the plaintiff to offset or exceed the claim made by the plaintiff.

Some possible defenses available to the defendant are: "lack of jurisdiction," "failure to state a claim," "statute of limitations," "comparative negligence," "assumption of risk," and "failure to mitigate damages."

The case will be heard by a jury if the suit was filed in the type of court which allows for a jury and either party demands a jury. For example, no jury is allowed in a court of Equity, which is a court that grants relief in the form of personal decrees instead of money damages.